Riyadh Business Setup
If you’re thinking about setting up a business in Riyadh, then you’ve come to the right place. Riyadh is one of the fastest-growing cities in the Middle East, and its government has been investing heavily in infrastructure and business-friendly policies to attract foreign investors.
However, navigating the intricacies of law and bureaucracy in a new country can be an overwhelming task, which is why we’ve put together this guide to give you an overview of what to expect when setting up a business in Riyadh.
In this blog, we’ll cover essential topics like legal structures, registration processes, corporate taxes, and other essential aspects that will help you establish your business successfully. If you’re ready to begin or explore more about Riyadh’s booming industry, then read on.
1. Obtaining a Foreign Investment License from Saudi Arabia’s General Investment Authority
To start a business as a foreign investor in Saudi Arabia, obtaining a Foreign Investment License from the General Investment Authority (GIA) is mandatory.
The process for obtaining this license starts by submitting an application to the GIA, which should be attached with necessary documents such as a copy of the company’s articles of incorporation approved by the Ministry of Commerce and Industry.
The GIA issues licenses on the basis of fair and equal treatment, ensuring that foreign investors have the same rights and obligations as local investors. The executive regulations for the system are also issued by the GIA.
Once the license is obtained from the GIA, the Ministry of Investment of Saudi Arabia (MISA) issues business licenses. It is important to note that certain industries allow 100% foreign ownership.
Requesting an attestation for a contract from the Ministry of Foreign Affairs is also necessary, and entrepreneurs should choose and reserve a trading name for their Saudi business.
While former restrictions on foreign business ownership in Saudi Arabia existed, it is now possible for foreigners to invest and start investing on the same day, thanks to the reduction in procedures by the GIA.
Overall, for those interested in starting a business in Saudi Arabia, obtaining a Foreign Investment License from the GIA is the first step in the process. With the right documentation, careful attention to the necessary procedures, and knowledge of the industries that allow 100% foreign ownership, investors can set themselves up for success in the Saudi Arabian market.
2. Requirements for Starting a Business as a Foreigner in Saudi Arabia
To start a business as a foreigner in Saudi Arabia, there are certain requirements that must be met. Firstly, the foreigner must obtain a foreign investment license from the General Investment Authority in Saudi Arabia. This license is required for any foreigner looking to invest in Saudi Arabia.
Secondly, the foreigner must ensure that the type of investment and business they plan to undertake is among the businesses that the foreign investor has the right to practice, and that they meet the necessary conditions. Additionally, the foreigner must choose and reserve a trading name for the Saudi business they plan to establish.
Thirdly, the Ministry of Investment of Saudi Arabia (MISA) issues business licenses, which the foreigner must obtain. The MISA provides support to investors during all stages of their work, from incorporation until the start of doing business, through “service centers” that are spread throughout the country.
Fourthly, the foreigner must obtain an entrepreneur license for the new company in Saudi Arabia. This license is necessary for foreigners who plan to establish a business in Saudi Arabia and it serves as a proof of registration.
Finally, the foreigner must also consider former restrictions on foreign business ownership in Saudi Arabia and the need for a Saudi sponsor for starting a business as an expat in Saudi Arabia. These requirements must be carefully considered as part of the overall process for setting up a business in Saudi Arabia.
3. 100% Foreign Ownership Allowed in Certain Industries
If you’re a foreign investor looking to start a business in Saudi Arabia, you’ll be pleased to know that 100% foreign ownership is now allowed in certain industries as part of the country’s 2030 vision. This shift in policy is a positive step forward for the country’s economic growth and diversification.
To take advantage of this opportunity, you’ll need to obtain a Foreign Investment License from Saudi Arabia’s General Investment Authority. This license allows international businesses to expand to Saudi Arabia by allowing complete foreign ownership of companies, without the need for a local partner.
It’s important to note that while foreign ownership is allowed in certain industries, restrictions may still apply in others. It’s always best to do your research and seek professional advice before investing in a sector that may have additional requirements or limitations.
The Ministry of Investment of Saudi Arabia (MISA) issues business licenses for those interested in starting a company in the KSA. This license can be obtained by establishing a newly created entity or by acquiring the shareholding of an existing company.
An entrepreneur license is also important for a new company in Saudi Arabia, as it allows for flexibility in business operations and provides access to government services and support. In addition, a contract attestation from the Ministry of Foreign Affairs may be required for certain business transactions.
AstroLabs can assist you in registering a 100% foreign-owned company in KSA, as well as choosing and reserving a trading name for your Saudi business.
Formerly, the requirement for a Saudi sponsor was needed to start a business as an expat in Saudi Arabia. However, with the new policy shift towards 100% foreign ownership in certain industries, this requirement is no longer necessary.
By following these steps and doing your due diligence, you can take advantage of the new policies in Saudi Arabia and set up a successful foreign-owned business in the country.
4. Ministry of Investment of Saudi Arabia (MISA) Issues Business Licenses
After obtaining a foreign investment license from Saudi Arabia’s General Investment Authority, the next step is to obtain a business license from the Ministry of Investment of Saudi Arabia (MISA). MISA offers an expedited timeframe of 2-3 weeks to issue the license for foreign-owned companies who wish to invest in Saudi Arabia. This investor license is a company license category, designed to attract established international companies to expand into Saudi Arabia.
MISA offers supportive and advisory services to organizations to deliver solutions to their business needs and implement local solutions by drawing on a wealth of knowledge and experience. Commercial registration, along with supporting licenses, is issued by MISA and the Ministry of Commerce (MoC) once the required documents are submitted. The process for establishing a Saudi company can take from 2-4 weeks, depending on the business activity.
It is essential to obtain an entrepreneur license for a new company in Saudi Arabia, as it allows the owners to become a registered member of the Saudi Arabian business community. Moreover, an attestation for a contract from the Ministry of Foreign Affairs is required to ensure the legality of a contract.
AstroLabs can assist with registering a 100% foreign-owned company in KSA, including choosing and reserving a trading name for a Saudi business. It is important to note that certain industries allow 100% foreign ownership, but some require a local Saudi sponsor. However, with a MISA license, foreign owners can have 100% business ownership without any local sponsors.
It is significant progress that MISA has made to establish itself as a “one-stop-shop” for companies interested in investing in Saudi Arabia. The Ministry of Investment of Saudi Arabia is doing its best to be proactive and support the growth and development of businesses in the country, making it easier for international investors to conduct business in Saudi Arabia.
5. The Importance of an Entrepreneur License for a New Company in Saudi Arabia
When starting a new company as an entrepreneur in Saudi Arabia, obtaining an entrepreneur license is of utmost importance. The entrepreneur license is issued by the General Investment Authority of Saudi Arabia and is required for all foreign investors who plan to establish a business in Saudi Arabia. The license is a legal requirement and is mandatory for setting up a new business or expanding an existing one.
To obtain an entrepreneur license, the entrepreneur must meet certain requirements, such as having a minimum capital of SAR 500,000 and a commercial office in Saudi Arabia. The entrepreneur must also provide a detailed business plan that outlines the nature of the business, its objectives, and its expected financial performance.
Once the entrepreneur has obtained the entrepreneur license, they will be able to enjoy various benefits such as being able to open bank accounts, hire staff, and conduct business activities freely in Saudi Arabia. The entrepreneur license also protects the entrepreneur’s interests and ensures that they are operating their business legally and within the confines of Saudi Arabian laws.
In addition to the entrepreneur license, there are other licenses that may be required depending on the nature of the business. For example, a commercial registration certificate, a commercial license, and a municipal license. These licenses must also be obtained before the entrepreneur can start operating their business.
Overall, obtaining an entrepreneur license is essential for any foreign investor looking to establish or expand their business in Saudi Arabia. The license ensures that the entrepreneur operates legally within Saudi Arabian laws and provides various benefits that allow for the smooth operation of the business.
6. Requesting an Attestation for a Contract from the Ministry of Foreign Affairs
When setting up a business in Riyadh, it’s important to know the legal requirements and procedures for attesting contracts from the Ministry of Foreign Affairs (MOFA). Firstly, it’s essential to obtain a Foreign Investment License from Saudi Arabia’s General Investment Authority. After that, the Ministry of Investment of Saudi Arabia (MISA) issues business licenses, including an Entrepreneur License for a new company.
To request an attestation for a contract from MOFA, the original contract and a copy of the contract must be presented. Both documents need to be translated into Arabic by a certified translator. The attestation process involves booking an online appointment with MOFA and providing the required documents, along with the payment of the attestation fee.
This attestation process is necessary for every type of document destined to be used in a foreign country. It’s important to note that any document valid within Saudi Arabia must also be attested by the Saudi Chamber of Commerce (COC) and MOFA where applicable. Furthermore, MOFA attestation is required for employment contracts or offer letters, which must also be attested by the COC in Saudi Arabia.
In the past, foreign business ownership in Saudi Arabia was subject to restrictions. However, with recent changes in regulations, 100% foreign ownership is permitted in certain industries. To register a 100% foreign-owned company in KSA with AstroLabs, it’s necessary to choose and reserve a trading name for the Saudi business.
While starting a business as an expat in Saudi Arabia requires a Saudi sponsor, the former restrictions on foreign business ownership have been lifted in certain industries. By following the legal procedures for obtaining licenses and attesting contracts from MOFA, it’s possible to start a successful business venture in Riyadh.
8. Choosing and Reserving a Trading Name for a Saudi Business
When starting a business in Saudi Arabia, choosing and reserving a trading name is a crucial step. The process can be made relatively easy with the help of a local company. First, it is necessary to check the availability of the desired name and reserve it with the Unified Centre. There are special requirements that must be met when choosing a trading name. Once the name is approved, the next step is to apply for a license at Saudi Arabia’s General Investment Authority (SAGIA), which can take up to three to four weeks.
To reserve a name, log in to the Unified Centre’s website with a username and password, click on the “My Trade Names” icon, and fill in the required information while specifying the type of booking as Suggested-Special. In the past, foreign investors had to have a local sponsor to register a business in Saudi Arabia, but the rules have changed. Now, foreign investors can have 100% ownership in certain industries. However, it is still mandatory to obtain a SAGIA license and register with the Ministry of Commerce and Industry (MOCI) to start a business in Saudi Arabia.
It is worth noting that the Saudi government takes the naming process seriously, and certain names may not be approved due to cultural or religious sensitivity. Foreign businesses operating in the kingdom should also be aware of the need to request an attestation for their contracts from the Ministry of Foreign Affairs. AstroLabs provides registration services to help foreign investors successfully register their companies in Saudi Arabia.
In conclusion, choosing and reserving a trading name is an essential step when starting a business in Saudi Arabia. It is necessary to check for availability and comply with special requirements before submitting an application for a license. While the process may seem daunting, with the help of local companies and service providers, it can be made relatively simple.
9. Former Restrictions on Foreign Business Ownership in Saudi Arabia
- Former Restrictions on Foreign Business Ownership in Saudi Arabia
In the past, foreign businesses faced numerous restrictions when attempting to establish a presence in Saudi Arabia. However, in recent years, the government has made significant efforts to encourage foreign investment and promote economic growth in the country. As a result, many of these restrictions have been lifted, and foreign businesses are now able to enjoy greater freedom and flexibility when operating in Saudi Arabia.
It is important to note that while there were previous restrictions on foreign business ownership, certain industries have always been open to 100% foreign ownership. In addition, foreign businesses were able to operate in Saudi Arabia through partnerships with local companies, which allowed them to bypass some of the ownership restrictions.
Now, however, certain industries that were previously restricted are now open to foreign investment, and the country’s investment laws have been reformed to make it easier for foreign companies to establish a presence in Saudi Arabia. The country’s Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil, has been a driving force behind these changes.
Foreign businesses looking to establish a presence in Saudi Arabia should still seek expert advice and follow the necessary steps to ensure compliance with local regulations. This includes obtaining a foreign investment license from the General Investment Authority, registering with the Ministry of Investment for a business license, and choosing and reserving a trading name for the company. With the support of qualified professionals and the right guidance, foreign businesses can successfully build a presence in Saudi Arabia and take advantage of the country’s growing economy.
10. Need for a Saudi Sponsor for Starting a Business as an Expat in Saudi Arabia
Section: 10. Need for a Saudi Sponsor for Starting a Business as an Expat in Saudi Arabia
Expats interested in starting a business in Saudi Arabia must have a local sponsor who holds a residency permit and can act as a liaison with the government. The sponsor may be an individual or a company and must be a Saudi national or a foreigner with a Saudi partner.
The local sponsor’s responsibilities include obtaining necessary permits, licenses, and approvals from government agencies, ensuring compliance with local laws and regulations, and representing the company in case of any legal or administrative issues. Moreover, the sponsor may also assist in identifying potential business partners and customers.
For the sponsor’s services, the expat pays an agreed fee or enters into a partnership agreement. The sponsor’s role varies depending on the type of business entity and the agreement between the sponsor and the expat. In some cases, the sponsor may have a stake in the business or participate in the decision-making process.
Although finding a suitable sponsor may seem challenging, there are many reputable sponsorship companies or individuals that can provide the necessary assistance. It is advisable to conduct due diligence and choose a sponsor who has a good reputation, expertise in the relevant industry, and understands the expat’s needs and goals.
Having a local sponsor is an essential requirement for setting up a business in Saudi Arabia. Hence, expats should ensure they have a reliable sponsor to smoothen the incorporation process and achieve business success in the kingdom.
In conclusion, expats must follow the necessary procedures and regulations set by the Saudi government to establish a legal and successful business in the kingdom. By obtaining a foreign investment license, working with specialized offices, obtaining necessary approvals, and finding a trustworthy sponsor, starting a business in Riyadh can be a lucrative and rewarding experience.
